Kissinger on Japan Giving a Global Hand

Yomiuri: We think that U.S.-Japan relations are facing a crucial period. What steps should be taken by both nations to ease the current high tensions, especially over trade?

Kissinger: It is imperative that the tensions be eased and that the United States and Japan work closely together. Neither country has an alternative and conflict between our two countries would be a disaster for both.

I’ve been convinced for a long time that the case-by-case approach to the trade surplus is not working. We cannot go from computer chips to (a construction contract for) the Osaka Airport to whatever other issue there may be at any one moment. We must come to some comprehensive agreement. We should try to agree on a global deficit we are willing to accept and then we could make joint efforts to achieve it. Then we would not be asking the Japanese government to restrict automobile exports one minute or something else another minute. We would study it, agree on some global deficit--the trade can never be in balance--and then coordinate policies so we do not have the constant pressures of constant negotiations. Second, we might agree on some global goals we share in the field of development of the Third World. But we have to get off this constant discussion, this moving from crisis to crisis. For example, it must have been painful for Prime Minister (Yasuhiro) Nakasone to come over here in an absolutely no-win situation. We could not lift the sanctions for our domestic reasons. He needed us to lift the sanctions for his domestic reasons. The issue has to do with one item--on which both sides could be right for all I know--and it is not a dignified position for either government to be in.

Q: In an article on U.S. security interests in Asia, you touched on the famous 1% of the gross national product that Japan devotes to defense. You predicted that Japan would emerge as a major military power in the not-too-distant future, and you wrote that the decision of Japan to breach its limit of 1% on its defense expenditure would cause alarm among Japan’s neighbors. You also said that such an increase was unnecessary to maintain global equilibrium. Could you elaborate further?

A: There are a number of separate problems here. First, on the point of alarm among Japanese neighbors. That is a fact and the Chinese have expressed alarm. And Korea has expressed alarm. I simply stated a fact.

Second, on the question of whether Japan should breach the 1% limit or not, the point I was trying to make is that this was essentially a decision that Japan has to make for its own national reasons. The United States should not press Japan one way or the other because this is a Japanese national decision. It is not a decision that we should press for economic reasons . . . . Many people in this country want Japan to rearm in order to reduce our trade deficit. That’s ridiculous. Now in terms of the global equilibrium, I do not think it is imperative for Japan to rearm. In terms of the regional position it is a decision for Japan to make.

In my view Japan will emerge as an increasingly significant military power. That will happen even if it sticks to the 1% percent limit because the Japanese GNP is rising and Japanese technology is improving constantly--is already maybe the best in the world--so that 1% will become a larger and larger sum. Second, a country with the traditions of Japan is likely to want to play a larger role in its own self-defense.

Q: In the same article you also wrote that Japan could make a more significant contribution to global peace by increasing aid to developing nations than with a larger military program. Could you elaborate on this point, too?

A: Again, the proposal was aimed at the general proposition that exists in this country that Japan is economically so powerful because it is not spending enough on defense and that therefore the United States should put pressure on Japan to increase defense spending. I am trying to discourage that proposition by urging that if we bring pressure on Japan to increase its national expenditures it should be in the direction of global economic development . . . helping the Third World with its debt problem. I don’t have a complete proposal, but I think it cannot go on that every year there is a crisis with one country that is fixed temporarily, and the next year there’s a crisis with another country and that the crises always get resolved by the country’s borrowing more money and thereby increasing its total debt burden. It is in the long term unwise for banks or for Western governments to loan money that comes back to them right away in the form of interest payments.

A way has to be found to stimulate the economies of these countries. That also would ease some of the economic pressure on Japan because if we could export more to those countries, our total trade deficit wouldn’t be so large. Japan’s recent new lending program will be very constructive and make a significant contribution if it is part of a global program, if it isn’t tied to buying only in Japan, and if it becomes part of a general effort to increase the economic growth of these countries.